Where There's A Will, There's A Way To Keep Peace

Pamela Dittmer McKuen

When Marilyn Hagler married for the second time in 2000, she and her husband pooled their assets. They built their dream house and created an estate plan that provides for each other and their children by previous marriages when one of them dies.

"You never know what is going to happen," said Hagler, 56, an Oswego resident. "Part of our responsibility is to make sure everything is in order as well as it can be."

Hagler's foresight puts her in the minority. According to Nolo.com, an online law information center, 70 percent of Americans do not have wills. If you die without one, the state where you live has written one for you.

Attorney Jack O'Drobinak of Crown Point, Ind., and a former Lake County, Ind., probate commissioner, recalls a case in which a husband and wife with no children decided not to make an estate plan until one of them died. The survivor would divide the assets between their respective families. One night they were driving home when a truck hit their car. The husband died first and the wife died a half hour later. Without a plan, all assets went to the wife and then to her family.

"The couple never intended for that to happen, but I had to follow the law," O'Drobinak said.

Illinois law splits an estate 50-50 between the spouse and children.

Some people erroneously believe they don't have enough assets to bother with a will or estate plan, said Hagler's financial planner, Diane Maloney of Beacon Financial Planning Servi-ces Ltd. in Plainfield.

"The issue of planning for when you pass on is not because you think you have so much but to designate what you want to do with those things and consideration for those you leave behind," Maloney said.

Consider the advice of professionals who have witnessed smooth transitions and refereed some bad ones:

Many parents believe if they divide the estate equally, the children will be happy. Not necessarily true, said attorney Les Kotzer of Thornhill, Ontario, author of "The Family Fight: Planning to Avoid It" (Continental Atlantic Publications, $19.95)

"When a caregiving child gets exactly the same amount as the one who only came in at Christmas and who didn't take Mom to doctor's appointments or put her on the toilet, the child feels used," he said. "This translates to real bitterness after Mom dies."

Similar hostilities may arise when one child receives an expensive education, has children with costly medical or mental disabilities, or is more successful than the siblings.

"If one child is successful and another is not and you go according to need, the child who did well arguably needs less than the child who didn't do well," said Dean Hedeker, an attorney and certified public accountant in Deerfield. "That's a struggle because parents are penalizing a child who did well if they give him less."

One way to level the economic playing field is to give the caregiver or other exceptional child a gift of money or property during the parent's lifetime and then give all children equal shares of the estate after the parent's death.

Baby Boomers who have children from multiple marriages may find that divvying up the pie is difficult, especially when assets are scarce. Life-insurance policies can be used to provide for first families while creating new assets with the present family, Maloney said.

One enraged woman smashed a crystal vase, one she had given her mother, in Kotzer's office rather than have it sold with other personal effects as decreed by the will.

"I have seen horrific fights between children because the parents have not planned for their personal items," he said.

Give away personal treasures while you are still living or mark them with the name of the intended recipient. Be very specific with your descriptions, Kotzer advised.

"`Antique' is a common term, but not in terms of a will," he said. "To a daughter, a 1960s clock may be an antique. To the son, it's not an antique because he's not getting any antiques. Or if you say, `I leave my diamond ring,' please specify whether it's the $10,000 one or the $500 one."

"I've seen [clauses] in wills where the deceased stated that if anybody contests it, they will automatically be disinherited," Maloney said.

Choose an executor or trustee whom you trust to carry out your wishes and who accepts the responsibility for doing so.

One husband and wife named co-executors--one of her adult children from a previous marriage and one of his. In addition, they chose the children they believe are the most business-minded.

"Parents assume good will among their children," Kotzer said. "I've seen a parent put in a will, `I'll leave it all to Billy, and Billy will look after his brother.' Maybe he doesn't want to give it to the other son because creditors might take it. So Billy gets it. He had no obligation to dole it out."

Another scenario is when Dad puts certain assets in joint tenancy with Billy, believing that any unused portions will be divided among siblings. Billy keeps it for himself.

Even if Billy is willing to share, he may have tax consequences when he transfers ownership of these assets, Maloney said. "It's much better for parents to designate what the parents want," she said.

Estate planners usually recommend that documents be reviewed at least every two years. Hagler has done just that as she has gone through various life changes. For the moment, however, she is satisfied.

"If something happens, I have peace of mind knowing that things are in place," she said.